1. Which of following is true about the private investors?

a. In a private-to-public transaction, market beta has to be scaled up to capture the risk exposure of investors.

b. In a private-to-private transaction, market beta has to be scaled down to capture the higher risk-aversion of the undiversified investor.

c. Undiversified investors require a higher rate of return from the same investment, leading to a lower value of the investment.

d. Undiversified investors view the same investments less risky than more diversified investors.

2. Can a share of common stock be outstanding but not authorized or? issued?

A. No. Outstanding shares have been authorized and issued.

B. No. The authorized shares have to be voted on by the outstanding shareholders.

C. Yes. The outstanding shares represent the total number of shares the company has available.

D. Yes. The shares are issued when voted by the board of directors at the annual shareholders meeting.